Lawmakers Introduce Bill to Delay Implementation of Section 174 Amortization
On January 16, 2024, Senate Finance Chair Ron Wyden (D) and House Ways & Means Chair Jason Smith (R) introduced The Tax Relief for American Families and Workers Act of 2024. This bipartisan tax proposal would reinstate domestic R&D expensing retroactive to 2022 and would remain in effect for tax years beginning before January 1, 2026. Foreign research costs would continue to be amortized over 15 years during this period.
In addition to the reinstatement of Section 174 deductibility, this bill would also extend 100 percent bonus depreciation, increase Section 179 limitations to adjust for inflation, tie the 163(j) limitation to EBITDA, and provide tax breaks for families. Similar to Section 174, these provisions would sunset in 2025. Additionally, this bill would bar any Employee Retention Credit claims after January 31, 2024 in order to combat the continued fraudulent claims associated with this program.
While there has been discussion on how to expedite the package by January 29 to coincide with the beginning of the tax filing season, there is still much that needs to be done before the bill becomes law. McGuire Sponsel will continue to provide updates as they become available.
David Seibel is an engineering principal for the R&D Tax Credit Practice. He combines his knowledge of tax law with his engineering expertise to maximize companies’ research credits and reduce their overall tax burdens.
David ensures clients are receiving studies that meet the highest level of quality. He conducts fieldwork, produces detailed technical calculations, and builds narratives that accurately reflect each company’s research and experimentation activity.
Recent Resources
-
R&D Tax Credit ServicesDecember 22, 2023
IRS Unveils ERC Voluntary Disclosure Program
by David Seibel, EAAs a Christmas gift to taxpayers, the IRS announced a new ERC Voluntary Disclosure Program for erroneously filed ERC claims....
-
R&D Tax Credit ServicesOctober 25, 2023
IRS Announces ERC Withdrawal Process
by David Seibel, EAOn October 19, 2023, the IRS announced a special process for employers to withdraw their Employee Retention Credit (ERC) claims if they...
-
Alliance NetworkSeptember 15, 2023
McGuire on the Wire Episode 80
by TJ Sponsel & David Seibel, EATJ Sponsel and David Seibel, EA, join the podcast this week to discuss the recent IRS guidance on Section 174...
-
R&D Tax Credit ServicesSeptember 12, 2023
IRS Releases Framework for Section 174 Amortization Guidance
by David Seibel, EAOn September 8, 2023, the IRS issued Notice 2023-63, which provides long-awaited guidance for the types of costs that must...